18. United Nabvia and Fernsland, two neighboring nations, have some political differences. Thus, United Nabvia has banned the import of wine from Fernsland. This is an example of a(n) _____.

a) embargo

b) quota

c) subsidy

d) tariff

e) import duty

19. An apparel company sells its products in foreign markets at prices lower than the production cost. This practice is referred to as _____.

a) price ceiling

b) price skimming

c) dumping

d) factoring

e) benchmarking

20. The Organization of Petroleum Exporting Countries (OPEC) consists of 12 member countries across three continents. It aims to increase the price of petroleum throughout the world and to maintain high prices. This organization is an example of a _____.

a) customs union

b) trade bloc

c) franchise

d) cartel

e) conglomerate

21. Which of the following is true of a group of nations that have formed a cartel?

a) The member nations are barred from indulging in trade with other nations.

b) They act as a monopoly to generate a competitive advantage in world markets.

c) They can compete with each other in terms of price and quality.

d) They can only import but cannot export.

e) The member nations prohibit free trade among themselves.

22. Which of the following organizations was created in 1995 by the Uruguay Round and is based in Geneva, Switzerland?

a) The Federal Trade Commission

b) The World Trade Organization

c) The North American Free Trade Association

d) The European Union

e) The Asia-Pacific Economic Cooperation

23. Which of the following is true of the North American Free Trade Agreement (NAFTA)?

a) It makes it tougher for businesses in the United States to invest in Mexico.

b) It provides protection for intellectual property.

c) It complicates the country-of-origin rules.

d) It has virtually eliminated tariffs on goods traded between the United States and Cuba.

e) It enforces trade restrictions on agricultural goods.

24. Which of the following trade alliances is likely to promote economic cooperation between Australia, Canada, and Singapore?

a) The Association of Southeast Asian Nations (ASEAN)

b) The European Economic Community (EEC)

c) The North American Free Trade Agreement (NAFTA)

d) The European Union (EU)

e) The Asia-Pacific Economic Cooperation (APEC)

25. From the perspective of the United States, the process of foreign companies transferring tasks and jobs to U.S. companies is called _____.

a) importing

b) factoring

c) benchmarking

d) dumping

e) insourcing

26. Companies that want a high degree of control and are willing to invest considerable resources in international business may consider _____ as their method of entry into foreign markets.

a) strategic alliances

b) outsourcing

c) franchising

d) exporting

e) direct investment

27. A country barters the surplus coffee beans it grows for other agricultural products grown in a neighboring country. There is no exchange of currency between these countries. The type of business arrangement between the two countries can be regarded as a(n) _____.

a) countertrade arrangement

b) cartel arrangement

c) embargo

d) dumping arrangement

e) franchise

28. Which of the following is true of export agents?

a) They usually produce goods themselves.

b) They usually handle domestic transactions for firms.

c) They never take products on consignment.

d) They are responsible for storage and transportation of a product they sell.

e)They are not interested in making a profit for services they provide.

In international business, an advantage of trading through an export agent instead of directly is that the company does not have to deal with:

a) a middleman.

b) rising labor prices.

c) foreign currencies.

d) the problem of providing discounts.

e) the procurement of resources.

30. Which of the following is an example of a global strategy?

a) McDonald's in Vietnam offering McPork sandwiches specifically for Vietnam consumers

b) Consumer electronics companies developing different marketing strategies for different foreign markets

c) Starbucks standardizing its products across the United States and other countries

d) General Motors creating electric vehicles specifically for the Chinese market

e) International fast food chains refraining from using pork or beef only in the Indian market